Uganda’s public debt surged 9% to Shs107T in 2024, raising economic concerns over debt servicing, fiscal pressure, and project funding.
📉 Uganda’s Public Debt Surges to Shs107 Trillion Amid Budget Deficit
Kampala, April 2, 2025 — Uganda’s total public debt has jumped to Shs107 trillion ($28.3 billion) as of December 2024, a sharp 9% rise from Shs96.6 trillion a year earlier, according to the Ministry of Finance Debt Statistical Bulletin.
This mounting debt load has triggered alarm among economists and policymakers, as debt servicing now takes up an increasing share of government revenue—crowding out key investments in infrastructure, health, and education.
📈 What’s Driving Uganda’s Rising Debt?
The Ministry of Finance attributes the surge primarily to increased domestic borrowing aimed at plugging the 2024/25 budget deficit. Reliance on treasury bonds and loans from domestic banks has caused a spike in domestic debt.
Meanwhile, external debt slightly declined from $14.91 billion in September 2024 to $14.60 billion in December 2024. This decline is due to:
- Principal repayments totaling $148.8 million
- Favorable exchange rate effects worth $391.3 million
→ Explore: Uganda’s External Debt Structure 2024
💸 Economic Implications: A Closer Look
1. High Debt Servicing Costs
In the FY ending June 2023, Uganda spent Shs8.3 trillion ($2.2 billion) on debt servicing—32.5% of its total domestic revenue.
→ How Uganda Spends Its Budget: Debt vs Development
2. Reduced Funding for Key Sectors
As more revenue goes to debt repayments, critical sectors like healthcare, education, and infrastructure face reduced funding.
→ Uganda’s Infrastructure Projects at Risk?
3. Debt-to-GDP on the Rise
Uganda’s debt-to-GDP ratio is projected to hit 52.7% by June 2025, and 53.0% by 2025/26, before gradually declining.
→ Debt-to-GDP Explained: Uganda vs Other EAC States
⚠️ Expert Warnings & Policy Proposals
Economist Dr. Fred Muhumuza warns that Uganda’s heavy reliance on debt may become unsustainable:
“We need a strategy that prioritizes revenue generation, reduces reliance on borrowing, and ensures that borrowed funds are used effectively.”
Experts recommend:
- Expanding the tax base
- Enhancing domestic revenue mobilization
- Improving spending transparency
- Limiting non-productive borrowing
→ Uganda’s Revenue Collection Strategy: What Needs Fixing
🛣️ The Road Ahead for Uganda
As Uganda manages these fiscal risks, international lenders and domestic investors will be closely monitoring:
- Implementation of debt management reforms
- Execution of priority development projects
- Transparency and governance of public funds
